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Obsessed with making changes

I have to say that the Conservative Party’s plans to discard mortgage regulation and to prune financial services regulation in general sound to me like little more than shallow electioneering. What the financial services community and its customers, of course, really need is regulation that is clearer, fairer, more stable, more consistent, more cost-effective and a regulator that is more accountable to the industry it charges handsomely to support it.

For example, I still do not understand why the FSA considers itself unable to produce a practical, workable and manageable, regularly updated manual of good practice for each of the different sectors that it regulates. If we had that, practitioners might well read the updates every month or two to ensure that we keep on the right track.

I do not understand why the FSA is so obsessed with forever changing everything (other than to justify its own existence) and why it finds itself unable ever to leave anything well alone instead of working in partnership with the industry (some hope) to improve and refine the regulatory structures already in place. Is the industry not reasonably entitled to clarity and stability after 20 years of hugely expensive regulation? TCF, as we know, is the exact opposite of what ought by any reasonable measure to be central tenets of any regulatory structure.

I do not understand why the average salary of FSA employees is £52,000 or why the directors are paid hefty bonuses every year, regardless of how well they as individuals or the FSA as an organisation have performed. Why is the FSA allowed to get away with spending colossal sums of our money on expensive works of art, Christmas bashes and staff leaving parties? “None of your business” seems to be the tacit attitude of those who benefit from the FSA’s pay structures. Actually, it is very much our business because we fund those pay structures.

I do not understand why the FSA still has a hugely expensive final-salary pension scheme. I do not understand why there appears to be no sort of disciplinary procedure within the FSA in respect of individuals who have conspicuously failed to discharge their responsibilities in a competent and diligent manner.

The general practice seems instead to move such individuals quietly sideways. I do not understand why the turnover of FSA staff is reportedly so high. Why is the pernicious and unjust practice of regulation by hindsight being allowed to persist? And so on and so on.

The industry does need regulation, not necessarily less of it, but a rather different and better regulator.

Julian Stevens
Partner
Harvest IFM Bristol

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